Nafed to sell cotton on NSEL platform

Written by fe Bureau | Mumbai | Updated: Mar 1 2009, 04:14am hrs
The National Agricultural Cooperative Marketing Federation (Nafed) has decided to offer cotton through online spot trading system, the National Spot Exchange Ltd (NSEL). The federation has so far sold about 2,500 bales averaged around Rs 20,000 per candy valued at Rs 3 crore - Rs 4 crore through the online platform and may gear up for the sale from next week.

The federation has so far procured total of about 35 lakh bales from states including Maharashtra, Gujarat and Andhra Pradesh. We will continue to sell cotton through all methods including online trading. Small buyers have a good option to buy through online platform as there is no competition on sales up to 10,000 bales, said UKS Chauhan, managing director, Nafed said. This week, cotton sales has evoked good response as the major buyers in the contracts were Vardhman Mills, JG Spinning Mills, GIMA Textiles and exporter Ram Gopal Ramesh Kumar.

The spot contracts in which sale transactions happened were Wani, Aurangabad and Nagpur delivery contracts. Since Nafed stock is lying at CWC (Central Warehousing Corporation) or SWC (State Warehousing Corporation) warehouses, the same warehouses have been designated as delivery centers of NSEL. Hence, Nafed does not incur any expenses on transportation; rather it is sold on ex-warehouse basis from existing locations, Anjani Sinha, managing director, NSEL, said. NSEL has launched 11 contracts for Maharashtra, 3 contracts each for Gujarat and Andhra Pradesh.

We have started participating in NSEL. We want to experiment with this new initiative. I believe the future of commodity trading lies in such electronic markets only.This will help us in reducing our cost of procurement as well as eliminating all counter party risks, an official of a leading export house said.